jimp Re- Your house being down -20% from comps at the 'peak'
Again, I think everyone is taking housing bubble/bust way, way out of context.
First, if everyone tried to sell their homes all at once- those values at the peak could not be maintained, or even reached.
In perspective here:
If someone bought their house 5 years ago for say $400,000 and for the first 3 years it went up 5% per year, and then 40% for years 4 and 5 during the crack up boom of the bubble - making it's 'comp' based market value $907,000 at the end of 5 years, and then it falls 40% today- which would take it down to $545,000- it would still have appreciated at an annual rate of over 7%. Which is still above historic averages.
My point is that 'comp' values at the peak in hot markets are irrelevant, unless you bought at the top and are trying to unload it today.
I still firmly stand by the fact that the average homeowner is NOT in the market to buy, or sell and the vast, vast majority of Americans never participated in bubble appreciation, let alone the buying, or selling of a home in the last 5 years.
The entire housing bubble was just a 'paper' bubble for most of America. . And for all of those people- all the noise about a housing bubble is just that- noise.
We survived new construction booms and busts all through the 1970's and 1980's. This one will be survived as well. And I for one, could give a rats ass about empty condo's in Miami, track homes that builders have to pack with give-aways in Las Vegas, or that the markets in California which have been in complete disconnect with 90% of America for over 3 decades are seeing double digit declines.
Again, the vast majority of America is not either buying, or selling a home. They didn't spend more because of "OPHB" (Other Peoples Housing Bubbles) and they wont spend less because of "Other Peoples Housing Bust."
This was a bubble that needed to be popped. It should have happened a long time ago.
This isn't the first housing bust I've seen and it isn't the first subprime bust either.
I think this is going to end up being much adoo about nothing.
By the way, I have a question for the gold bulls here.
If housing was a bubble because it's falling 10%.
Why did 99% of you insist all the way down from HUI 400 to 280 (a 30% collapse) that gold stocks weren't in a bubble?
Housing falls less than 10% and it's a bubble and the world is going to end. But, gold stocks can fall 30% and they were never in a bubble?
Hell, gold stocks went up more from 2000 to 2006 ( a 10 fold move in the HUI index) than housing in the hotest of markets ever dreamed of going up.
But, yet housing is a bubble and gold was just cheap. And housings 10% correction is the end of the world, but gold stocks 30% correction is no worry for all of you that 'buy and hold'? <vbg>?
I bet more people 'buy and hold' their houses- that gold bugs buy and hold their gold.
Again,
Much adoo about NOTHING.
Ron
Ron
Ron |
